Ethereum News Today: Institutional Capital Drives DeFi's $237B TVL as Retail Users Retreat

DeFi's total value locked (TVL) surged to a record $237 billion in the third quarter of 2025, while daily active DApp wallets fell 22.4% to 18.7 million, according to DappRadar data. The divergence highlights a growing disconnect between institutional capital inflows and retail user engagement in the decentralized finance sector. Despite the TVL milestone, DApp activity declined across all categories, with SocialFi and AI-focused DApps experiencing the most significant attrition, losing 1.7 million and 2.3 million daily users, respectively .

The surge in DeFi liquidity was driven by institutional adoption of stablecoins and real-world asset (RWA) tokenization, alongside regulatory clarity from the U.S. GENIUS Act. Stablecoin inflows reached $46 billion in Q3, led by Tether's USDT and Circle's USDC. New infrastructure, such as Plasma-a layer-1 chain dedicated to stablecoins-launched with $8 billion in TVL within its first month, further boosting liquidity . Meanwhile, Ethereum retained its dominance as the largest DeFi network with $119 billion in TVL, though it saw a 4% quarterly decline. BNB Chain, the third-largest network, recorded a 15% TVL increase, attributed to the launch of perpetual decentralized exchange Aster, while Solana's TVL contracted 33% to $13.8 billion .

The decline in DApp engagement reflects shifting user priorities. AI and SocialFi sectors, which had driven earlier growth, saw sharp drops in participation. DappRadar noted that institutional flows into DeFi protocols contrasted with waning retail interest, signaling structural changes in the ecosystem. "The entire quarter saw a drop in active wallets, with Social and AI categories bearing the brunt," the report stated, underscoring the sector's evolving dynamics .

Network performance varied widely. Ethereum's TVL remained robust, but its active address count declined. BNB Chain, however, saw a 57% surge in active addresses to 47.3 million, fueled by Aster's launch and reduced gas fees. Solana's TVL and DEX volume grew, but it lost its lead in monthly active addresses to BNB Chain. Meanwhile, data integrity concerns emerged for Aster, as DefiLlama delisted the DEX after detecting volume patterns mirroring centralized exchanges .

The Q3 data underscores a broader trend: institutional capital is increasingly shaping DeFi's trajectory, while retail participation remains volatile. Regulatory clarity, stablecoin growth, and RWA adoption have bolstered TVL, but user activity metrics reveal fragility in decentralized application ecosystems. As BNB Chain and Ethereum vie for dominance, the sector's future will hinge on balancing institutional demand with sustainable user engagement .

Source: [1] DeFi TVL Hits Record $237B As DApp Wallets Drop 22% In Q3 (https://cointelegraph.com/news/defi-tvl-record-237b-dapp-wallets-drop-22-q3-2025)

[2] DeFi TVL Reaches $237B Amid Decline in Active Wallets - Phemex (https://phemex.com/news/article/defi-tvl-hits-record-237-billion-despite-22-drop-in-active-wallets-25139)

[3] Record DeFi TVL in Q3 May Mask 22% Drop in DApp Wallets as ... (https://en.coinotag.com/record-defi-tvl-in-q3-may-mask-22-drop-in-dapp-wallets-as-ethereum-remains-top-network/)